Senate Bill 76 Explained

Goal: Eliminate all school property taxes across the Commonwealth and replace those taxes with a combination of funding from the Personal Income Tax and the Sales and Use Tax.

Why:

The school property tax has been a primary source for school funding since the 1830s. The legislature cannot continue to “fix” or “reform” this archaic tax – that is why we are proposing a new education funding model that would promote economic growth and completely eliminate the school district property tax once and for all.

How:

Increase the Sales and Use Tax by one percentage point and broaden the base of the state sales tax to include more services and products. Necessities and business-to-business transactions will continue to be exempt from the sales tax. Revenue generated: $5.552 billion

In 2012, after a thorough analysis, the Independent Fiscal Office found the original proposal, SB 1400, would leave a $1.509 billion gap in current public education funding. Using the IFO report, we tweaked SB 1400 to achieve adequate school district funding:

Increase the proposed PIT increase included in SB 1400 of 4.01 to 4.34 percent. This would generate an additional $1.179 billion in revenue.

Currently, telecommunications is subject to the state Sales and Use Tax. SB 1400 accidentally omitted this service. Including it in SB 76 is would generate an additional $341 million in revenue.